Engineering Economics

Course Name: 

Engineering Economics (HU300)


B.Tech (MME)




Humanities and Social Science Core (HSC)

Credits (L-T-P): 

(3-0-0) 3

Course Outcomes: 

CO1: Become acquainted with basic economic concepts such as demand and supply, price, competition, interest, taxes, profit, inflation, etc.
CO2: Develop a significant understanding of the time value of money
CO3: Develop the ability to apply various methods for economic analysis of alternatives
CO4: Develop the ability to make replacement decisions
CO5: Basic understanding of project risk and uncertainty using sensitivity and break-even analysis

Course modules and teaching hours: 

Module 1: (15 Hours)
Basic economic concepts and problems: Economic development and its impact on Science, Engineering Technology and Society (Environment), Resource constraints and welfare maximization, Physical and economic efficiency. Concepts of value and utility, Economic aspects of exchange, Theory of utility and consumers choice. Theories of demand, supply and Market equilibrium. Elasticity of demand and demand forecasting. Cost estimating and cost terminology

Module 2: (8 Hours)
Methods of economic analysis in Engineering: including time value of money, equivalence, Interest calculations. Bases for comparison of alternatives- Present worth, Annual equivalent, Future worth, Internal rate of return, Capitalized equivalent, Capital recovery with return. Selection among alternatives, Break-even analysis

Module 3: (5 Hours)
Evaluating replacement alternatives: Replacement analysis, the economic life of an asset, Retirement or abandonment decisions. Evaluating public activities: The nature of public activities, Benefit-cost analysis, Cost-effectiveness analysis

Module 4: (5 Hours)
Depreciation accounting: Basic depreciation methods. Basic terminology for Income taxes, Depreciation and Income taxes

Module 5: (6 Hours)
Estimating economic elements: Cost estimation methods, adjustment of cost data, Estimates and decision-making, allowances for uncertainty in estimates, Analysis of construction and production operation. Economic aspects of location, Economic aspects of Equipment


Thuesen G.J. and Fabrycky W.J., “Engineering Economy “, 9th ed., Prentice Hall of India, New Delhi, 2002
Sullivan W.G., Bontadelli J.A. and Wicks E.M., “Engineering Economy “, 11th ed., Pearson Education Asia, New Delhi, 2001
Leland Blank P.E. and Anthony Tarquin P.E., “Engineering Economy”, 4th ed., McGraw Hill, Singapore, 1998
Newnan Donald G., Eschenbach Ted G., Lavelle Jerome P., Engineering Economic Analysis, Oxford University Press, 2004
N.Gregory Mankiw, Principles of Economics, Thomson, 2002


Humanities, Social Sciences and Management

Total teaching hours: 


Contact us

Prof. K. Narayan Prabhu, Head
Department of MME, NITK, Surathkal
P. O. Srinivasnagar, Mangaluru - 575 025
Karnataka, India.
  • Hot line: +91-0824-2473050